Unresolved trade pact: India to meet European Union in January

Months after it called off talks between chief negotiators of the two sides on free trade agreement (FTA) to protest against the ban on sale of around 700 pharma products of a domestic company, India will meet officials from the European Union (EU) later next month to “take stock of the negotiations” on the long-pending FTA.

Exports to the European Union shrank 4.4 per cent to .3 billion in 2014-15 while imports contracted 2.2 per cent to .8 billion. (Reuters)

Months after it called off talks between chief negotiators of the two sides on free trade agreement (FTA) to protest against the ban on sale of around 700 pharma products of a domestic company, India will meet officials from the European Union (EU) later next month to “take stock of the negotiations” on the long-pending FTA.

The meeting on the proposed Broad-based Investment and Trade Agreement (BITA), which was earlier scheduled for August 28, will now be held on January 17-18, a senior official said adding that the issue of ban is yet to be resolved.

“This is not a commitment to continue the talks. What will be seen is if the talks can be taken forward,” the official said adding that issue of pharmaceutical industry will also be taken up during the meeting.

Early in July, the EU had banned over 700 pharma products of GVK Biosciences, Hyderabad, for alleged manipulation of clinical trials conducted it and the decision was to come into effect from August 21. The suspension of sales and distribution of generic drugs ordered by the European Commission, which is the executive body of the EU for proposing legislation and implementing decisions, was to be applicable to all 28 member nations.

Following the decision, commerce and industry minister Nirmala Sitharaman decided to call off the talks and examine “all options in this regard” as the pharmaceutical industry is one of the flagship sectors of India.

In June the minister had met her European Union counterpart, trade commissioner Cecilia Malmström, on the sidelines of an informal meeting of trade ministers in Paris and the two sides had agreed to revive talks at chief negotiators’ level.

The official said that “the reason for resumption of talks is German Chancellor Angela Merkel’s visit here in October. India was assured that its concerns would be addressed to satisfaction and it is on this assurance that we have decided to move ahead with the dialogue”.

DG Shah, secretary general of Indian Pharmaceutical Alliance, said that the issue is not company-specific rather it relates to the industry. “In its observation, no one has raised concerns about the safety of the product. However, despite that the ban was imposed. These measures bring a bad name to the industry and the country. The concern of the government is not one company but the industry as whole, it is a matter of principle”.

“We have been in constant touch with the commerce ministry. It is a good sign and we will eagerly await for what emerges in the meeting,” Shah said.

The development comes at a time when trans-pacific partnership, a trade deal covering 12 countries including Australia, Japan, Mexico and the US has been announced. Amid a slowdown in its key economies, the EU has intensified its efforts to conclude the negotiations on the FTA with India.

In fact it has signalled its willingness to show flexibility on all major issues that have stalled the talks.

The last round of talks, which started in June 2007, was held in May 2013. However not much breakthrough was achieved due to EU’s concerns in areas including high tariffs on cars and wines, insurance, banking, retail, legal services, geographical indication, and public procurement while India’s concerns were on services.

Exports to the European Union shrank 4.4 per cent to $49.3 billion in 2014-15 while imports contracted 2.2 per cent to $48.8 billion.